(Ecofin Agency) - The call termination rate refers to the amount a telecom operator charges another operator to end a call or SMS on its network. In Ethiopia, it has been set at 0.31 birr per minute for fixed and mobile calls since 2022.

The Ethiopian Communications Authority (ECA) has established new termination rates for mobile and fixed calls, as well as SMS. The decision aims to enhance competition in the national telecom market and lower communication costs for consumers. It will come into effect on May 1.

The ECA has set termination rates at 0.23 birr (0.0041$) per minute for mobile, 0.15 birr per minute for fixed lines, and 0.05 birr per SMS. These rates will gradually decrease over the next five years to reach 0.19 birr, 0.12 birr, and 0.04 birr respectively by 2029. This regulatory decision follows a 2022 interconnection agreement between the incumbent operator Ethio Telecom and Safaricom, which was preparing to launch its commercial activities in the country. As part of this agreement, the ECA provisionally set mobile and fixed termination rates at 0.31 birr per minute. It then conducted a cost study to determine the actual termination rates.

The telecom regulator explained that the mobile termination rates (MTR) are a significant component of the overall communication cost for mobile phone subscribers. Given the impact of call termination rates on end-users, the ECA must address any market failures in the provision of mobile call termination services and ensure consumer interests are safeguarded.